Are You Leaving Money On The Table?

Many Providers Using Available Fee Schedule Analyzer Resources.

Many practice administrators liken not appealing usual and customary denials to leaving
money on the table. However, appealing denied benefits requires providers
to justify charges - a task many have found problematic.

The Solution:
Thanks in part to the
explosion of managed care, medical reimbursement rates are now readily
accessible to the public. Several companies provide average reimbursement
rates broken down by CPT code, specialty and geographic location. But
while insurers have been quick to capitalize on the use of such
information on claims where they expect to find incorrect or excessive
charges, providers have not traditionally used such tools to address
underpayment.

"You're losing money if you are a doctor and not using a fee analyzer. The
more ammo the better," said Wayne Germano, executive director for
Children's Eye Center in El Paso, Texas.

Germano says he purchases a fee analyzer every year from Medicode.
Medicode provides the reimbursement levels for CPT codes broken down by
zip code and specialty. The fee analyzer provides the reimbursement
information for your area's 50th, 75th and 95th percentiles to help
providers determine competitive fees. According to Medicode's promotional
information, the fees are drawn from a database of actual physician
charges containing over 500 million actual payor records.

The listing also gives providers the relative value units (RVU) for each
CPT code to allow you to better assess the reimbursement rates for
Medicare.

Germano says he uses the information to establish billing rates. However,
the fee analyzer is not put away until the next time billing rates are
adjusted. Germano routinely uses the information to appeal poorly paid
claims by writing a short letter with a copy of the usual and customary
rate for that CPT code from Medicode's fee analyzer.

Germano says he can easily cover the cost of the billing tool with just a
few appealed claims.

Two Resources Better Than One

Large group medical providers even buy multiple fee analyzers from
different companies so that they can compare reimbursement figures.
Rosemary Gammon, managed care negotiator for Pediatrix Medical Group,
Inc., says they use at least two such medical reimbursement databases in
order to establish rates and better negotiate contracts.

Gammon said they also use the information in appealing usual and customary
denials and out-of-network reimbursement. Pediatrix, based in Fort
Lauderdale, Florida, provides physician services to neonatal intensive
care units and is the largest physician practice management company in
that specialty group.

"This is the only business where you never know what you are going to get
paid." Gammon said.

One of the reimbursement references Gammon uses is compiled by
Atlanta-based Medirisk, Inc. According to Lisa Borders, Vice President of
Strategic Sales for the company, sales to medical clinicians have
accounted for only about 25 percent of the company’s sales while managed
care organizations account for the remaining 75 percent. Most of the sales
to medical providers are to large groups such as Pediatrix. However,
Borders says they do have some sole practitioners as clients. Aggregates
for a specific specialty and specific zip codes can be obtained for as
little as $700. Also included is an appeal letter which assists providers
in citing information from the database when appealing for additional
payment.

Borders states that sales to medical clinicians have grown within the past
18 months. She attributes this to the fact that more providers are merging
into larger groups. The concentration of personnel often allows the group
to designate a practice administrator whose job duties include securing
analytical tools for the business. Because of the increasing number of
patients in managed care, doctors have also had to assume more financial
risk associated with medical care. With the increased risk has come a need
to become more knowledgeable about the market value of medical services.

"Doctors are often unaware that this information even exists," said
Borders. "Payors have used it to negotiate with providers for years. We
want everyone to have this information so that it is a level playing
field.

"Everyone has an excel spread sheet but not everyone has the data. The
doctors have the spread sheet but they do not have the data."

While being a useful learning tool, Gammon says such reimbursement
databases are not without problems. For example, one of the most difficult
aspects of specialty medicine reimbursement is that, as new procedures
become more standard, codes are added to better represent the treatment
involved. New CPT codes are generally left out of the reimbursement tables
until statistics are gathered regarding reimbursement. According to
Borders, it takes about one year to generate enough claims to allow them
to reach a statistically sound aggregate for the code.

While they do appeal certain underpayments, Gammon said they typically
hold the patient responsible for usual and customary denials unless a
provider contract prohibits collecting such balances from the patient.
Many court decisions affirm the liability of the patient in situations
where their insurance carrier refuses to pay charges deemed above the
usual and customary. However, patients often protest the charges if their
carrier issues a denial stating the charges were excessive.

Again, providers who have a reimbursement reference which cites local
aggregates for the treatment may be in a better position to address
questions about the billing rates.

In a recent Indiana case, a patient was hospitalized at Columbus Regional
Hospital for 73 days for coronary care and subsequent rehabilitation. The
insurance carrier paid for the majority of the charges, but advised the
hospital that an auditing company had been retained to review the bill for
duplicate or excessively billed charges.

Columbus Regional responded with a letter stating they did not recognize
the decision of the auditing company named and sent a certified notice to
the patient requesting payment by a specified deadline. There was no
evidence that the patient responded to the notice or objected to the
charges until after suit was brought against him.

The court ruled that the patient owed the bill stating, "An agreement that
the balance is correct may be inferred from delivery of the statement and
the account debtor's failure to object to the amount of the statement
within a reasonable time."

Medical office staff members need to be aware that such usual and
customary denials are not automatic write-offs. A written policy should be
in place to deal with such denials, which incorporates both advising the
insurance carrier and patient of your position in the matter. Presenting
evidence to substantiate your billing will also establish your office as
one that is prepared to defend your treatment rates in any forum. Such a
policy often takes research and preparation but could substantially pay
for itself when accompanied by a successful appeals program.